Peanut buyers looking for new production areas

What is in this article?:

• “We’ve been losing peanut acres in Texas over the last six or seven years, particularly for runner peanuts, and we’ve been looking for new areas to maintain and increase our supply,” says Alan Ortloff, president of the Clint Williams Company, who spoke at the annual meeting of the Mississippi Peanut Growers Association.“The drought in west Texas in 2011 further emphasized to us the importance of diversifying our supply lines.

• “We like what we see in Mississippi — fertile land, ample water, and high caliber, professional farmers, who can produce high-yielding, high quality peanuts.”

Follow the value chain

“We like to follow the value chain, from providing seed to the grower, to transporting the peanuts, to processing them,” Lutt says. “And through our research and development programs, we look at ways to transform peanuts into value-added products.

“For example, we continue to look at what can we do with skins and shells; at compounds in the peanut we can extract, or that we need to explore further; and at ways we can do a more efficient job of distribution and selling our peanuts.”

“We all know peanuts are a great nutritious, low cost protein food. But we also sell hulls and skins in the feed market, along with peanut meal, which is a high quality protein feed. In the fuel sector, we’re pelletizing peanut hulls and shipping the pellets to Europe for bioenergy uses. Companies are switching from using petroleum-based construction equipment to peanut-based oils, giving them a more environmentally-friendly, ‘greener’ operation In the industrial area, granules produced from peanut hulls are being used in fertilizers, insecticides, and other products, and peanut oil has any number of industrial applications.

“We’re continually looking for ways to expand the volume of the products we can offer, and longer term, how we can further diversity tour peanut product portfolio — all of which comes back to the R&D side.”

The company has some unique products, Lutt says. “Peanut flour, for example, is a great niche product — just about any nutrition bar and many cereals use it. To make a pound of flour takes two pounds of peanuts. We also offer roasted aromatic oils, used for special flavorings to provide a distinct peanut taste. We export a lot of this. We also make a peanut extract, a flavoring that goes into cereals to provide a nice, distinct peanut flavor. And refined peanut oil is a high quality, premium oil that’s healthy and has a nice long shelf life.”

Birdsong Peanut Company

Mississippi’s record peanut acreage last year — an estimated 49,000 acres, compared to 15,000 to 18,000 acres in the 2005-2011 period — could grow even more, says Kevin Calhoun, procurement manager Birdsong Peanut Company.

The company significantly increased its facilities at Prairie, Miss., last year and constructed a new buying point facility at Walnut Ridge, Ark., which handled over 25,000 tons of peanuts in its inaugural season.

“Longer term, I think Mississippi has potential for twice the 2012 acreage,” he says.

But not in 2013, when the industry will still be working its way out from under the oversupply from last year’s crop. The Southeast states of Georgia, Alabama, Florida, Mississippi, and Arkansas could see an overall acreage decline of as much as 30 percent to 40 percent this year, Calhoun says.

The company had its start when the founder of Planters Peanuts, who started out selling peanuts on the sidewalks in Virginia, needed to increase his supply of peanuts. He worked out a deal with the Birdsongs to contract with growers for their peanuts.

“That was in 1914, and we give Planters a lot of the credit for our company,” Calhoun says.

Birdsong initially began buying peanuts from producers in south Mississippi, then branched out into the Delta, and later began working with growers in east Mississippi who wanted another cash crop for diversification.

“At that time, we were transporting peanuts 200 miles to south Alabama, so we established the buying point at Prairie, and we’ve seen a steady growth in that area. We handled a tremendous volume of peanuts there from the 2012 crop.”